You save code + accompanying documents in order to build up a portfolio to demonstrate to a potential employer how you work, how well you know your tools, and what your idea of a shippable product is. During the interview, you can talk about why you wrote the software, what designs you tried, what kinds of challenges you faced while doing so, and how you surmounted them.

At my company, we offer coding challenges for people who don't have a portfolio already. But really, why not just write software of your own choosing so that you don't need to do coding challenges to prove your ability? It's a far more efficient approach.